Income Tax return filing gives a legal sanction to your income and filing it before the due date saves you the gargantuan hassles, which you may have to face as consequences to the late and defective filing of the return. Moreover, the benefits of early filing of return come in multiples
Income-tax return filing doesn’t only make you a responsible citizen but also, it ensures smooth governance. The due date for filing the return for FY 2017-18 for individuals is July 31st, 2018. If you have a business and you are required to audit the book of accounts, then the due date is September 30th, 2018. Furnishing an income tax return gives a legal sanction to your income and filing it before the due date saves you the gargantuan hassles, which you may have to face as consequences to the late and defective filing of the return.
So gear up taxpayers! Collect all the important documents like PAN card, Aadhaar card, Form 16, Form 26AS, Bank details et cetera and file your ITR within these 24 days.
Here are 10 benefits of early filing of Income Tax return.
1) Avoid the hassles of late return filing
Filing a return is not like shopping for a commodity online. It requires a strategy and a certain amount of care while filling up the form. So, filing it before the due date will save you tonnes of troubles later. You may need to rectify and revise your return later if you do it in the last minute.
2) Carry forward of losses
The losses incurred by an individual or a firm, belonging to the financial year of the return filed, under the head “profits and gains of business and profession” both speculative and non-speculative as well as capital losses under the head “income from capital gains” can be carried forward. However, one can claim this benefit only if they have filed their income-tax return before the due date prescribed. Filing your tax return before the due date will eliminate the chances of losses not being carried forward.
3) Earlier e-verification of your return filed
The Income Tax Department has brought many much-needed modifications. One such advancement is e-verification of the ITR filed. The earlier you file your return, the sooner you get the verification done.
4) Faster processing of refund
The income tax refund process happens on a first come first serve basis. If you file your return now, before the due date, you will gain with an early refund.
5) Save yourself some interest
If you fail to file your income tax return before the due date(,) then you will be obliged to pay interest u/s 234A at the rate of 1 per cent for every month or a part thereof.
6) Avoid the defective return notice
To err is a human tendency. Chances of mistake may increase if you file your return just before the due date. Taxman may issue a defective return notice under section 139(9) of the Income-Tax Act, asking for the proof/ justification for the mistake and mismatch. The failure to respond can result in heavy penalties.
7) Avoidance of dreadful fee
Under section 234F of the Income-Tax Act, if a person required to furnish a return of income by July 31 fails to do so, then a fee of Rs. 5000 shall be levied if a return is furnished before 31st December. However, the fee shall be Rs. 10,000 if it is filed after 31st December. Moreover, if the total income of the person doesn’t exceed Rs. 5 lakhs, then the fee payable shall not exceed Rs. 1000.
8) Advantages in the processing of a loan
Banks and other non-banking financial institutions require your income tax returns to process home, educational and other types of loans. It is also mandatory to have income tax returns for the processing of any visa. Also, some credit card companies demand proof of tax returns before issuing a card.
9) Registration of immovable property
Some states require your income-tax return of the last three years for registration of immovable property. Also, a legal sanction to income whether taxable or not helps you pad up subsequently to account for the wealth or the property owned.
10) The last-minute surge can be avoided
Remember what happens when everyone tries to book a cab at the same time. Yes, there is a surge in fare. Similarly, high traffic on a website can often lead the site to face a temporary break-down. In such scenario, you may not be able to file your return in time. In order to avoid this last-minute unorganised chaos and compliance hazard, file your return by taking a suitable buffer in hand.